Court documents filed at the United States District Court for the Southern District of New York, examined by SecretsReporters, show that the Cross River State Government stood as a defendant in an American federal lawsuit for five years without entering an appearance at any point, until the court closed the case on April 12, 2024 in a judgment no Nigerian newspaper has ever reported.
The plaintiff is Oranefo Okolo, who sued as assignee of St. Luke’s Hospital Consortium. The suit, docketed as Case No. 19 Civ. 5329, arose from a Concession Agreement executed in 2014 between St. Luke’s and the Cross River State Government, under which St. Luke’s agreed to finance, renovate, manage and operate a hospital in Cross River State, the Obudu hospital project. Okolo’s claims were breach of contract and quantum meruit, and the amended complaint he filed on April 17, 2021 added claims for tortious interference with a prospective advantage and unlawful expropriation of property.
The New York case was Okolo’s second attempt. He had first sued the state government in the same court in 2018, in Case No. 18-cv-9479, on the same Concession Agreement. Judge Cathy Seibel denied his motions for default judgment in that case and dismissed it without prejudice on May 31, 2019, holding that he had failed to strictly comply with the requirements for service of process on a foreign state under 28 U.S.C. § 1608(a), and had failed to explain the failure.
Okolo filed the second suit days later, on June 6, 2019. On June 17, 2019, the Clerk of Court sent the summons, complaint, civil cover sheet and notice of suit by FedEx to the Cross River State Government, care of the Commissioner for Health at the Ministry of Health, and a docket entry of July 3, 2019 recorded that the package was received. The state government filed no answer and made no appearance, and on September 26, 2019 the Clerk of Court issued a certificate of default against it.
The case then moved through three judges without the state ever being heard. It was first assigned to Judge Deborah A. Batts, who died while Okolo’s default motion was pending, and was reassigned to Judge Analisa Torres on February 20, 2020. Judge Torres terminated the motion, issued an order to show cause why the case should not be dismissed for failure to prosecute, and on March 21, 2021 denied the default motion again and directed Okolo to address the state government’s liability and the court’s power over it under the Foreign Sovereign Immunities Act. The case was reassigned to Judge Vincent L. Briccetti on August 17, 2021.
Okolo’s second attempt at service went through the channel the statute prescribes. On April 29, 2021, the Clerk of Court mailed the summons, amended complaint, civil cover sheet and notice of suit by FedEx to the Minister of Foreign Affairs of Nigeria, and Okolo’s proof of delivery showed the package was delivered on May 5, 2021. The delivery document carried a fatal defect: it recorded that no signature was available for the shipment because a signature was not required, and Section 1608(a)(3) permits service by mail only in a form requiring a signed receipt.
Judge Briccetti ordered the state government to show cause on October 13, 2021 why default judgment should not be entered against it. The Cross River State Government did not appear at the hearing, and the matter was referred to Magistrate Judge Andrew E. Krause for a report and recommendation on the default application.
In his report and recommendation of November 16, 2022, Judge Krause held that both attempts at service had failed. The first package had been addressed to the state government itself rather than to the head of Nigeria’s ministry of foreign affairs as the statute commands, and the second, though correctly addressed, had been sent by a form of mail that did not require a signed receipt. He recommended that the default motion be denied and that Okolo be given one final opportunity to serve the amended complaint properly. Judge Briccetti adopted the report on December 5, 2022.
The case then turned from service to immunity. In a further report and recommendation, Judge Krause held that the Cross River State Government was immune from the suit under the Foreign Sovereign Immunities Act. The commercial activity exception on which Okolo relied requires a direct effect in the United States, and the court found none: the Concession Agreement was performed in Nigeria, the alleged breaches occurred in Nigeria, and the agreement imposed no obligation to make payments or perform any act in the United States. Without jurisdiction, the court could not reach the tortious interference claim at all.
Okolo filed objections, which the court considered after granting him an extension. On April 12, 2024, Judge Briccetti overruled the objections, adopted the report and recommendation in its entirety as the opinion of the court, denied the motion for default judgment and dismissed the case for lack of subject-matter jurisdiction. Judgment was entered on the order and the case was closed.
The dismissal decided nothing about the hospital. No court has ever tried whether the Cross River State Government breached the 2014 Concession Agreement, because the case failed first on service and then on immunity before the merits could be reached. The agreement itself was executed in 2014, when Liyel Imoke was Governor of Cross River State. The lawsuits ran from 2018 through the tenure of Governor Ben Ayade and into the first year of Governor Bassey Otu, and across those six years the record of the New York court shows no answer, no appearance and no filing of any kind from the government that was sued.
Source: …Secretsreporters